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Monsour cancels pension fund check

| Tuesday, Sept. 28, 2004

Monsour Medical Center in Jeannette stopped payment on a check that would have settled a financial dispute over the Jeannette hospital's pension plan. Union officials responded by scheduling a grievance hearing on the issue.

William Raber, president of the hospital's board of directors, confirmed Monday that someone had stopped payment -- against his orders -- to the National Industry Pension Fund of the Service Employees International Union.

"I'm not sure who it was, but that was not the directive given by the board or myself," Raber said. "I'm trying to get it all figured out."

Tammy Previc, an official with SEIU Local 1199P, which represents Monsour employees, said the union will hold a grievance hearing later today at Monsour.

"I just don't know who made the decision," Previc said. "It's not looking good for the workers."

According to records in U.S. District Court in Washington, D.C., Monsour owes $472,185 to the fund. The hospital had agreed to pay the principal on its debt and pension fund. Officials said they would try to resolve the interest and penalties, Previc said.

Raber said a check for $300,000 to $400,000 was sent to the fund, but was canceled.

"We certainly hope to meet our obligation," Raber said. "Efforts are under way to pay the pension. Money has been set aside to do so."

He said the payment on the check may have been stopped because the hospital wanted written assurances that the principal would have gone directly to the unpaid pension debt and not for the penalties.

"I don't see there's going to be a problem. I hope not," Raber said.

Meanwhile, the union is concerned about the future for Monsour's employees.

"I have no personal faith in their promises," Previc said. "There was no notification to us that they were doing that. I learned from the pension fund when the check had been deposited that the payment had been stopped."

In August, the pension fund trustee threatened to seize the hospital's assets and sell them if the money was not paid. Monsour promised payment, and a motion for a judgment filed against Monsour in Washington, D.C., in July was put on hold. Monsour mailed the check several weeks ago.

"They mailed the check and then stopped payment," said Marc Tenenbaum of Slevin & Hart, trustee for the fund. "We're just waiting for the judge to decide on the motion for default judgment. If its granted, we will pursue all legal remedies to enforce the judgment."

He would not say what legal action the fund would take.

Monsour emerged from bankruptcy last year with a plan to pay its debts. The hospital has not been able to meet those obligations and fell further behind in its payments to the federal government and pension fund.

In addition to the principal, Monsour owes the fund more than $72,000 in late charges plus another $4,600 in attorneys fees. When the hospital emerged last year from bankruptcy, Monsour pledged to make 18 monthly payments of $64,223 to settle its obligation.

Despite the oppressive financial strain, Raber said Monsour does not plan to file for bankruptcy again to protect itself from its debtors. Bankruptcy automatically halts any efforts at collecting debts.

"No, that's definitely not being discussed," he said of a bankruptcy option. "As always, our intention is to go forward."

Monsour's debt is staggering.

The hospital still owes the Pension Benefit Guaranty Corp. more than $752,000 for its previous pension plan. When the hospital fell behind in its pension payment to its hospital-managed program, it stopped making contributions and the SEIU placed union and some nonunion workers under the auspices of the union's plan. The PBGC in 2001 filed a judgment against Monsour.

Earlier this year, the Internal Revenue Service filed three liens totaling more than $218,000 for unpaid federal taxes. The state filed two liens totaling more than $95,000 because the hospital failed to pay its unemployment compensation premiums. An Alabama-based physician-recruiting firm filed a judgment in August seeking more than $4,400 in fees, claiming Monsour never paid it for its recruiting services.

Last year, the IRS filed liens for unpaid taxes totaling more than $1 million.

Monsour also has problems relating to the quality of care.

The state Department of Health earlier this month extended Monsour's provisional license for another six months after an inspection in August found that deficiencies from a previous inspection were not corrected.

The department says Monsour will have two more chances to comply with state hospital regulations or face the permanent loss of its operating license. The hospital has been given a deadline of March 17, 2005.

According to the department, Monsour still has not reviewed the qualifications of its physicians, and patient medical records remain incomplete. The inspection found that there are problems with maintaining an accurate drug inventory and that some medications had expiration dates of 2003.

"We've come a long way since the first inspection," Raber said. "I always look at it as a way to improve ourselves. We'll do what we're required, obviously."

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